It’s the week after Boris Johnson’s announcement of the third national lockdown, and the clock is ticking for any potential property buyers to take advantage of record-low interest rates and a generous stamp duty holiday.
Potential homebuyers who were watching the Prime Minister’s speech would have been waiting anxiously as to what the lockdown means for their chances of buying a new home in 2021– but Mr. Johnson didn’t actually mention the property market in his speech at all. It was covered off in guidance issued after the speech in the COVID-19 section of the Gov.uk website.
“The housing market in England will remain open during this national lockdown. This means that people looking to move home will be able to both continue with planned moves and view new properties to move into in the future. Estate and lettings agents, removers, valuers and people in sales and lettings offices and show homes will be able to continue working.”
Good news this time round, although the trepidation felt by those who are house hunting was well-founded. During the first national lockdown in March last year, the entire UK property market was put on hold. Building sites closed, and other parts of the industry such as estate agents, mortgage lenders, conveyancers and removal firms also had to cease their day-to-day operations.
This time around the country is better prepared for the effects of COVID-19. There are technological solutions for business, such as virtual viewings for potential buyers and surveyors, and remote working in the supply chain for lenders and conveyancers. There is also significantly less paranoia amongst younger people about how deadly the virus is, particularly if well-publicised precautions are taken where contact is necessary.
Some specific precautions to the property sector have been advised by UK’s largest property advertising website, Rightmove.
- Use virtual viewings of properties where available;
- Sellers should ensure properties are unoccupied when physical viewings take place;
- Government advice on social distancing should be followed during viewings;
- Masks should be worn by all parties during a viewing;
- Good hand hygiene and ‘touch free’ protocols should be in place during viewings;
- Thorough cleaning of properties before and after viewings.
Rightmove have published these to ensure the UK property market remains open for business, something that all estate agents, whether virtual or online, have an obvious interest in. The Managing Director of an independent estate agency group in the Midlands, Barrows and Forester, confirmed this point.
"While previous calls to work from home unless necessary will have caused many property professionals to struggle at the start of the last year, the industry was able to adapt and evolve to a remote, more digitally enabled way of working. With this practice remaining pretty much in place ever since, there should be little to no disruption for those currently selling and buying in the current market, and we expect to see no disruption as a result of this latest government announcement.”
So, it is possible to view properties for the purpose of buying, but one of the biggest issues with the property market last year was the slow pace at which lenders processed mortgage applications. This led to them withdrawing the most popular mortgages, especially those requiring a surveyor to physically inspect the property to be held as security. The segment of buyers that suffered the most were first time buyers with small deposits. What is in place to avoid a repeat?
Sat Singh, Director at Smartr Finance, had the following to say to reassure potential home buyers.
“The issue during the first lockdown was that lenders and surveyors had a one-dimensional approach to assessing mortgage applications and carrying out surveys. The lack of people in offices and a ban on person-to-person contact meant everything stopped overnight. This time round things are slightly more relaxed, as long as caution is exercised, and all parties have learnt how to maintain some semblance of normality to continue trading.
“In terms of impact on mortgage options, the good news is that there are more products available for first time buyers with a small deposit. There is more caution from lenders around affordability, with the amount they will lend being more restricted, so it is more important than ever to establish borrowing limits early on before the viewings start. A good broker can evaluate the entire market and ensure an ‘agreement in principle’ is obtained from the most appropriate lender, therefore avoiding disappointment once a property is found.”
For any mortgage enquiries, Smartr Finance can be contacted here.